How Would You Strengthen Medicare?

Have your say about 10 options on the table in Washington

Directions:

Step 1: Read the brief description of each policy option below. Step 2: Read the arguments for and against each option written by outside experts whose views
reflect both sides of the debate in Washington. Step 3: Choose which of the two statements you agree with more. (You may also select “neither.”) Step 4: Choose to send a message to politicians in Washington about how you would strengthen Medicare.

Raise the Medicare Eligibility Age

Since Medicare's creation in 1965, the eligibility age has been 65 (for people without disabilities). Some proposals would gradually raise Medicare's eligibility age from 65 to 67.

Which of the following statements do you agree with more?

Statement A

With more Americans living longer, and health spending on older people rising, we just can't afford Medicare at 65. It makes sense to increase the eligibility age slowly over 10 or 15 years to at least 67 — the normal Social Security retirement age — and for the eligibility age of both programs to rise gradually after that as Americans live longer. This would reduce Medicare's costs by about 5 percent over the next 20 years.

Statement B

Raising the age of eligibility for Medicare at this time would be a bad idea. It would save the federal government little money, raise total health care spending, impose significant financial burdens on many financially vulnerable seniors and impose new costs on businesses and state governments.

Most Medicare beneficiaries pay a separate monthly premium for doctor visits (Part B) and prescription drug coverage (Part D). The premiums people pay for parts B and D cover about 25 percent of what Medicare spends on these services. Some proposals would increase premiums for everyone in Medicare to cover a larger portion of the program's costs. Under one proposal, the standard Medicare premiums would go up by 40 percent (or $40 per month.) Part D premiums, which vary widely by plan and region, would increase similarly.

Which of the following statements do you agree with more?

Statement A

Increasing the basic premiums for Medicare Part B and Part D makes sense. It would help Medicare's finances and can be done while protecting lower-income seniors. Parts B and D are voluntary "add-ons" to the Medicare coverage seniors receive for hospital services (also known as Part A), which Americans pay for through the payroll tax.

Statement B

Some upper income Medicare beneficiaries can afford — and already pay — more than the normal premium. But for too many seniors, even current premiums are burdensome. In 2012, premiums for Medicare parts B and D average roughly $1,600 for a single person, and that does not include Medicare cost sharing expenses. Across-the-board premium increases would hit elderly and disabled persons who can ill afford higher premiums.

Most Medicare beneficiaries pay a separate monthly premium for doctor visits (Part B) and prescription drug coverage (Part D). The premiums people pay for parts B and D cover about 25 percent of what Medicare spends on these services. Individuals with annual incomes of more than $85,000 and couples with annual incomes above $170,000 pay higher premiums, up to three times the standard premium depending on income level. Under several proposals, these higher-income beneficiaries would be required to pay as much as 15 percent more than they currently pay.

Which of the following statements do you agree with more?

Statement A

The best way to generate more premium revenue to help pay for Medicare parts B and D is to raise premiums for higher-income seniors. That would improve Medicare's finances by bringing in more premium revenue, but without imposing burdens on modest-income seniors.

Statement B

On the surface, it may seem reasonable to charge Medicare beneficiaries with higher incomes more for parts B and D coverage. However, in reality, many of these proposals will push costs on to more middle-class beneficiaries. Also, some higher-income beneficiaries may decide it is more advantageous to drop out of parts B and D, which could increase costs for beneficiaries who remain in the program, making Medicare participation more expensive for almost everyone.

Under this proposal, newly eligible Medicare beneficiaries would receive their health coverage through private insurance plans, not traditional Medicare. Beneficiaries would choose among competing plans and the federal government would contribute a fixed amount to pay the premiums for the private insurance plan. If the private insurance premiums prove to be higher than the federal contribution or the federal contribution does not increase by the same amount as the annual cost in premiums, seniors would be required to pay the difference.

Which of the following statements do you agree with more?

Statement A

It makes sense to put Medicare on a long-term budget that reduces the burden on our children and grandchildren while making health care affordable for seniors. Premium support is the best way for Medicare to stay within a budget because it would give older people more control and choice over how that budget is actually spent.

Statement B

All current proposals carry a threat that the vouchers (government contributions) will not keep pace with rising health costs, threatening the elderly and disabled with increased health care costs they cannot afford. Not until we find out how to effectively enroll and pay subsidies to the working age Americans in the health insurance exchanges that are called for by the health reform legislation will it be time to consider whether to take on the much harder job of shifting elderly and disabled Medicare beneficiaries into such new and untested organizations.

Even with Medicare coverage, seniors are often left with significant health care costs, so many people purchase supplemental private insurance coverage (such as Medigap plans) to reduce their out-of-pocket expenses. One proposal would charge more for certain types of supplemental plans, such as those that cover all costs so seniors incur no out-of-pocket expenses themselves. Other proposals would limit what Medigap supplemental insurance plans will cover.

Which of the following statements do you agree with more?

Statement A

Current Medigap plans cover some routine costs most Medicare beneficiaries could pay for themselves, and they raise the cost of Medicare itself by increasing the use of Medicare-covered services while paying only part of the cost of this service use. Taxpayers pay the rest. Medigap plans should be changed to improve the coverage for serious illnesses and cover fewer small expenses. That change would lower Medigap premiums and Medicare costs, and improve the insurance protection Medicare beneficiaries need.

Statement B

It would be unwise to increase the premium amounts for Medicare supplemental insurance, such as Medigap, or to decrease the amount of coverage available to enrollees under these policies. There is no evidence that these reforms would deter the use of unnecessary health care services. Rather, these Medigap proposals would simply raise costs for Medicare beneficiaries and have an unfair effect on lower-income Medicare enrollees and those in poor health.

The IPAB is a group of 15 health experts who are required to recommend ways to hold down Medicare spending growth if that growth exceeds a certain amount. The IPAB has the authority to reduce payments to some Medicare providers (e.g., hospitals, doctors), but it cannot raise beneficiary premiums or reduce their benefits. Some proposals would change the law to give the IPAB more authority so it could also reduce benefits, while other proposals would further limit the amount of Medicare spending growth, which could require the IPAB to further reduce spending on doctors, hospitals and other health care providers. Some proposals would eliminate the IPAB altogether.

Which of the following statements do you agree with more?

Statement A

The IPAB is a promising way to limit the growth of Medicare spending without rationing care or cutting access to care by the elderly and disabled. The IPAB should be retained and strengthened so it can improve incentives for doctors, hospitals and other providers to deliver higher-quality care at reasonable costs. Some members of Congress want to kill the IPAB even before it goes to work because of a mistaken belief that it usurps congressional authority. It does not.

Statement B

The IPAB was created in the new health law to cap total Medicare spending so it grows only a little more each year than the economy grows. To accomplish this, the 15 unelected board members will be able to cut payments each year to physicians, hospitals and Medicare plan providers by however much it takes to stay under the spending cap. The board's cuts will go into place automatically and nobody — not the courts or even Congress itself — can stop them. This board should be dismantled.

Medicare does not charge a copay for patients whose doctors prescribe home health care or for the first 20 days in a skilled nursing facility. Several proposals would require a copay for home health care, including one that would require a payment of $100 for home health episodes with five or more home health visits and add copays for the first 20 days of care in a skilled nursing facility. Medicare does not currently require a copay for laboratory services (such as blood and diagnostic tests). A number of proposals would require beneficiaries to pay 20 percent of the cost of laboratory services.

Which of the following statements do you agree with more?

Statement A

Imposing a copayment for home health care, skilled nursing facility care and laboratory services will discourage unnecessary use of these services. Shifting more of the cost for these services to Medicare beneficiaries will also reduce Medicare costs and help to improve the long-term stability of the program.

Statement B

Many Medicare beneficiaries — particularly those who are low income and do not qualify for any additional assistance — will have trouble affording new copayments for home health care, skilled nursing facility care and laboratory services.

Under current law, drug manufacturers are required to give rebates or discounts to the Medicaid program for prescription drugs purchased by Medicaid beneficiaries. However, Medicare Part D — the optional prescription drug coverage — does not require similar manufacturer rebates or discounts. This proposal would require manufacturers to provide rebates and discounts to Medicare for low-income Part D enrollees in the same way manufacturers provide rebates and discounts to Medicaid.

Which of the following statements do you agree with more?

Statement A

If drug companies were required to give the same discounts for drugs for low-income seniors with Part D coverage as they now provide for Medicaid enrollees, Medicare spending would be cut $112 billion over the next decade. (The Veterans Administration demands — and gets — similar discounts.) These savings would spare the nation the need to raise taxes or cut other spending by similar amounts. This is a simple and effective way to save money for Medicare and help lower the federal budget deficit.

Statement B

Some people think requiring drug companies to reduce the prices they charge Medicare for low-income seniors with Part D drug coverage would reduce Part D costs and be a good idea. It's not a good idea. Prices would just go up for other Americans, and there would be less research on cures for diseases such as Alzheimer's.

Estimates show that waste and fraud in the health care system cost taxpayers tens of billions of dollars every year. Proposals to reduce fraud include increasing the penalties for fraudulent activities, such as the illegal distribution of Medicare patient and provider information.

Which of the following statements do you agree with more?

Statement A

Increasing penalties on providers and others who commit fraud can reduce such behavior and lead to substantial savings. Dollar for dollar, addressing fraud in this way is an effective strategy compared to other approaches. For every dollar spent on such activities over the past three years, the federal government has collected more than $7 in return.

Statement B

There is little evidence that fraud is deterred by harsher sanctions. People who commit fraud may not care about sanctions or may gamble that the payoff is worth the risk — even if the penalty for fraud is substantially increased. In addition, the threat of harsher sanctions may intimidate physicians and other providers who fear they may be prosecuted for innocent mistakes. Some providers may stop participating in Medicare or other health care programs to avoid the hassle and expense of an audit.

The primary source of funding for Medicare hospital services (Part A) comes from the payroll tax. Workers and their employers each contribute 1.45 percent of earnings for a total contribution of 2.9 percent. It's estimated that beginning in 2024 Medicare will not have enough money to pay for all of the expected hospital expenses. Increasing the payroll tax rate by 0.5 percent to 3.9 percent (or to 1.95 percent each for workers and employers) would raise additional revenue for Medicare's inpatient hospital expenses. For an individual earning about $50,000 a year in wages, this increase would amount to an extra $250 in Medicare payroll taxes per year.

Which of the following statements do you agree with more?

Statement A

Medicare hospital insurance faces a small long-term deficit. That gap can, and should, be closed by a modest increase in payroll taxes. In addition, some changes in benefits are in order to improve protections against extended or repeated hospitalizations. There is no reason to perpetuate the myth that Medicare hospital insurance is in crisis. It isn't. Vigorous enforcement of the health care law together with this modest tax increase will secure hospital insurance for current and future Medicare beneficiaries.

Statement B

Addressing Medicare's long-term financial problems by raising payroll taxes on working Americans is not the answer. Doing so will make the situation worse for the economy and for our children and grandchildren, and it will erode the political will to undertake needed reforms. We need to make sure that programs like Medicare don't take such a large share of the economy in the future that there is not enough for other critical goals such as education, rebuilding our roads and bridges, and defending America. We've got to get the future costs of Medicare down, not tax Americans more.